In­vest­ing in Turkey

Hospitality News Middle East - - CONTENTS -

Turkey’s in­com­ing tourist fig­ures have fallen sharply since Au­gust 2015, with the de­cline ex­ac­er­bated by the travel ban on Rus­sian tourists – the coun­try’s sec­ond­biggest source of vis­i­tors - im­ple­mented by Moscow. How­ever, there are signs of light at the end of the tun­nel ac­cord­ing to Mehmet Önkal CHA, ISHC, man­ag­ing part­ner of BDO Hos­pi­tal­ity Con­sult­ing

Rewind to the mid-1980s, and Turkey’s tourism in­dus­try was un­de­vel­oped, with vis­i­tor num­bers to­tal­ing less than three mil­lion. How­ever, driven for­ward solely by the vi­sion and ini­tia­tive of Prime Min­is­ter Turgut Özal, a new era in tourism dawned. Spe­cial ‘tourism de­vel­op­ment’ laws were en­acted for the de­vel­op­ment of sea­side re­sorts, which pro­vided in­vestors with use­ful ad­van­tages. Many mon­e­tary and non-mon­e­tary in­cen­tives were ap­plied to tourism investments in Turkey in the 1980s, which helped to boost the num­ber of ho­tel beds al­most 1000-fold to over 1.3 mil­lion. The num­ber of ar­rivals also rock­eted, sur­pass­ing 37 mil­lion in 2015, mark­ing an in­crease of more than 1200 per­cent in less than 40 years.

Turkey is well sit­u­ated ge­o­graph­i­cally for all of the prime tourist-gen­er­at­ing coun­tries of Europe and the Mid­dle East. The most con­ve­nient means of travel for vis­i­tors is by air. In­ter­na­tional sched­uled ser­vices are mainly pro­vided by the na­tional car­rier, Turk­ish Air­lines, along­side other in­ter­na­tional air­lines. Turk­ish Air­lines flies to more coun­tries and des­ti­na­tions than any other air­line in the world.

Turkey of­fers a vast ar­ray of ex­pe­ri­ences, from beach hol­i­days along its 7200 kilo­me­ters of coast­line to win­ter sports in the moun­tains and count­less his­toric sites to ex­plore. Vis­i­tors can im­merse them­selves in its rich his­tory, dis­cov­er­ing more about the suc­ces­sive peo­ples that have occupied Ana­to­lia over the last 10,000 years (Hit­tites, Ly­cians, Ly­di­ans, Lo­ni­ans, Phoeni­cians, Tro­jans, Per­sians, Hel­lens, Ro­mans, Byzan­tines, Seljuks and Ot­tomans) and catch a glimpse of their re­mains. The coun­try boasts more than 60,000 sites of his­toric in­ter­est, as well as the nat­u­ral won­ders of Pa­mukkale and Cap­pado­cia. Turkey also has huge po­ten­tial for niche tourism, in­clud­ing the cul­tural, congress and con­ven­tion, shop­ping, health­care and re­li­gious seg­ments.

The bad news

Turkey’s tourism sec­tor is cur­rently grap­pling with huge losses, with bomb at­tacks, un­rest in the south­east of the coun­try and a vi­o­lent coup at­tempt, fol­lowed by mass ar­rests dur­ing a state of emer­gency, keep­ing vis­i­tors away.

Rus­sia was one of Turkey’s most valu­able mar­kets for in­com­ing tourism. How­ever, in the first four months of 2016, the num­ber of Rus­sian tourists en­ter­ing Turkey dropped by 40 per­cent, driven down pri­mar­ily by po­lit­i­cal dif­fer­ences be­tween Ankara and Moscow. Bi­lat­eral ten­sion was trig­gered by the shoot­ing down of a Rus­sian bomber plane by Turkey’s air force in north Syria. Mil­lions of Rus­sians who tra­di­tion­ally pop­u­late Turkey’s beaches stayed away. Rus­sian vis­i­tors to An­talya, Turkey’s tourism cap­i­tal, de­creased by 95 per­cent. In 2016, the num­ber of vis­i­tors to Turkey plum­meted to 25 mil­lion.

Bomb at­tacks in Is­tan­bul, Ankara and other cities have also se­verely af­fected the coun­try’s broader tourism in­dus­try. In June 2016, ISIS mil­i­tants killed 45 peo­ple and in­jured many more in an at­tack on Is­tan­bul’s Atatürk In­ter­na­tional Air­port, the main point of en­try to Turkey. In Is­tan­bul, the num­ber of for­eign vis­i­tors dropped over 25 per­cent. The sit­u­a­tion de­te­ri­o­rated fur­ther on July 15, when Turkey was hit by a failed coup, in which 246 peo­ple were killed. As a con­se­quence, the tourism

in­dus­try in Turkey ex­pe­ri­enced a sig­nif­i­cant de­cline in vis­i­tor num­bers, with book­ings for the sum­mer hol­i­day sea­son down by 50 per­cent.

The bright side

De­spite the cur­rent chal­lenges stem­ming from the re­cent drop in Rus­sian tourist num­bers and the vi­o­lence still en­su­ing in sev­eral parts of the re­gion, Turkey’s tourism in­dus­try is bat­tling hard to main­tain growth. Turkey achieved a yearon-year in­crease in tourism rev­enue of 1.3 per­cent in 2016, inch­ing up to about USD 4.87 bil­lion in the first quar­ter of 2017. Tourist ar­rivals were up by 2.37 per­cent, with for­eign vis­i­tors reach­ing 1.9 mil­lion.

Turkey is also hop­ing to con­tinue re­pair­ing the dam­age by at­tract­ing tourists from other mar­kets. The coun­try is prov­ing es­pe­cially pop­u­lar among vis­i­tors from China and the Arab re­gion, with tourists from Tu­nisia, Al­ge­ria, Jor­dan, Bahrain and Le­banon ar­riv­ing in in­creas­ing vol­umes. The num­ber of vis­i­tors from Mace­do­nia, Bul­garia and, es­pe­cially, Ge­or­gia and Ukraine, is also on the rise.

Turkey and Rus­sia have agreed to im­prove their re­la­tions, which is be­ing seen by many as a pre­lude to the re­turn of Rus­sian tourists to Turkey. Tourism of­fi­cials and pro­fes­sion­als are claim­ing a re­vival in reser­va­tions from Rus­sia.

While eras­ing the ef­fects of such an ex­ten­sive cri­sis will take time, Turkey has, again and again, proved its re­silience and abil­ity to suc­cess­fully emerge from chal­leng­ing sit­u­a­tions. The strength of the Turk­ish re­ac­tion was ev­i­dence af­ter the Atatürk air­port bomb­ing. Whilst closed with flights blocked in the im­me­di­ate af­ter­math, the air­port re­sumed op­er­a­tions just a few hours later.

Se­cur­ing a re­cov­ery in Turkey’s tourism in­dus­try will take a pe­riod of peace, some­thing that has been miss­ing in the coun­try for around a year. Per­haps un­sur­pris­ingly, in times of rel­a­tive calm, tourists have been shown to re­turn.

Known for cen­turies as a strate­gic stop along the Silk Road, Is­tan­bul is cel­e­brated for its tra­di­tional street food and sweets, and as a melt­ing pot of Mid­dle Eastern, Mediter­ranean, Balkan and Cen­tral Asian fla­vors. How­ever, in Is­tan­bul, as else­where in the world, glob­al­iza­tion and ur­ban­iza­tion have led to peo­ple los­ing touch with their food’s ori­gins.

A grow­ing mid­dle class, ris­ing house­hold in­comes and a young Turk­ish pop­u­la­tion – over 50 per­cent are un­der 30 years of age – are com­bin­ing to bring about changes in the culi­nary tastes of young, ur­ban Turks. Driven by ur­ban­iza­tion, the tra­di­tional food mar­kets called ‘bakkal’ are be­ing sub­sti­tuted by mod­ern gro­cery re­tail­ers, such as ‘Eataly’. Glob­ally-known brands and prod­ucts are also be­ing given more and more space on the shelves of su­per­mar­kets. So what’s next for Turkey? As long as the coun­try’s econ­omy con­tin­ues to grow, the food in­dus­try will strengthen in its role as a place for lo­cal and in­ter­na­tional com­pa­nies to do busi­ness. Let’s take the ex­am­ple of choco­late as a trend and growth area. Con­sumers have been able to find in­dus­tri­al­lypro­duced choco­late made by multi­na­tional and lo­cal brands and high-end con­fec­tionery items in su­per­mar­kets or pas­try shops fa­mous for their choco­lates since the early days of the Turk­ish repub­lic.

How­ever, to­day, small patis­series and choco­latiers are also pop­ping up, sell­ing hand­made bon­bons, such as truf­fles, pra­lines or the choco­late Napoli­tains called ‘Madlen’. These out­lets are pro­duc­ing high-co­coa con­tent bars with health ben­e­fits, which means that the qual­ity of the choco­late it­self is be­ing given more im­por­tance.

In ad­di­tion, clas­si­cal Turk­ish recipes are be­ing re­vamped and cre­ated with choco­late as an in­gre­di­ent. My team and I have de­cided to re­spond to this de­mand and cre­ate Turk­ish clas­si­cal recipes revisited at Choco­late Academy™ cen­ter. These in­clude a fa­vorite across the gen­er­a­tions - ‘sut­lac’ - a milk rice pud­ding with white Calle­baut choco­late; a ‘baklava’, with an or­ange-pis­ta­chio and dark-choco­late fill­ing; and the clas­si­cal, iconic break­fast ‘acma’ and ‘simit’, with dark Calle­baut choco­late. These are only a few ex­am­ples of the clas­si­cal desserts we have cre­ated us­ing choco­late, but giv­ing it a mod­ern twist.

TRA­DI­TIONAL TURK­ISH DE­LIGHTS GET A MAKEOVER

Marc Pau­quet Head of the Choco­late Academy™ Cen­ter Is­tan­bul and Tech­ni­cal Ad­viser EEMEA Barry Calle­baut

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